Selling Horse Property and Horse Farms...

When selling an Equestrian Property, the MOST important thing you can do is to:

Hire a Knowledgeable Professional!

There are literally dozens of small mistakes you can make in selling a special property like a Farm or working Horse Ranch.

Even in the best markets where farms and land are selling in just days or hours, some properties just don’t sell. In many areas of the country over the last several years, more than half the properties that have been placed on the market for sale have failed to sell during their listing period. 

There are 5 major reasons a farm or ranch doesn’t sell:

Incorrect Pricing - Too high or to low can keep the home from selling. In this world of computer searches and literally thousands of properties on the market in the Lehigh Valley, your property can easily be missed if it is priced incorrectly.

Improper Marketing - Too often the agent you hire is too busy showing homes and prospecting to effectively market your property. In this market, placing the home on the MLS, putting a sign on the property and running an ad aren’t enough. You need a full marketing program.

Poor Staging - Often an overlooked area of selling homes, this can often be the critical difference between selling and not selling. See Deadly Mistake #4!

Poor Location - This is often more an excuse for a property not selling. Many farms and historic properties are located on busy streets, bad corners, wetlands areas, near train tracks or other problem locations. These problems can generally be corrected in the price. Any home will sell at the right price or terms.

No one is buying in the area - Many areas go through periods when few or no homes sell. But the truth is there are always properties selling. Your property has to be the most appealing to the marketplace!

Every seller wants to realize as much money as possible when he or she sells a property. But a listing price that is too high will often get the seller less than a price that is at Market Value. If your Ranch or Farm is not priced competitively, people looking in your price range will reject your property in favor of other, larger properties for the same price. At the same time, the people who should be looking at your property will not see it because it is priced over the price range in which they are looking. Overpricing usually increased time on the market and that adds to carrying costs. Ultimately, many overpriced properties sell below market value.

A side mistake is that many property sellers subconsciously select an agent based on the price the agent tells them. Whoever comes in with the highest price for the property must be the agent to select! That is almost always not true. There will always be an agent who will give you some high number in order to "get your listing" so the agent has inventory to market and place a sign on. Always select an agent based on their knowledge, experience and strength of their actual marketing plan.

Some of the things you should ask an agent about price:

We’ve invested a lot of money in our property. What is the difference in the cost we incurred to fix up this property versus what we’ll actually net from it when we sell?

How do we set the asking price? What really is market value?

 

Avoid Typical Seller Thinking that "My Property is the BEST!"

Avoid this line because it isn’t true. The most common line I hear is "there is no property comparable to mine". The truth is that there are always several properties on the market in competition with you, even if you don’t realize it. To you, your property might be "the oldest farmhouse in the area", or have the "best location" or "that property up the street doesn’t compare with mine because I’ve got this, that and the other thing".

The plain truth is that the property probably is comparable to most buyers and that’s who matters!

While it may be true that you have a unique and beautiful property, the fact that you have rolling hills, great views or a historic property doesn’t mean that your property is worth significantly more than those competing against you. Most people are very proud of what they own and that’s a great notion. But you must look logically at the property you’re about to sell. Don’t be swayed by your own emotions or your desire to make more money on a property. Any farm or ranch is a commodity, just like a stock or bond. It’s only worth what buyers are willing to pay for it.

Buyers look for homes. They look for their dream. They very seldom look for places they can turn into their dream. Owners who fail to make necessary repairs, who don’t spruce up the house inside and out, touch up the paint and the landscaping, and keep it clean and neat chase buyers away as rapidly as Realtors can bring them.

If you were selling a car today, you would wash it thoroughly. You’d probably clean the inside and maybe even detail it to get the highest price. A buyer will pay more for a car if it sparkles. Selling a farm or ranch works the same way, and it’s worth much more than a car! Remember my 2 favorite expressions: "You never get a second chance to make a good first impression." and "A can of paint costs $15, but can be worth $1500 when applied correctly."

Trying to sell your property yourself? For Sale by Owners often get more activity that properties listed with a Realtor. Why is that, you ask, when Realtors have so many more avenues to bring in prospective buyers? It’s simple: Realtors will only bring Qualified Buyers, and these will be fewer than if you open your front door to everyone who walks down the street. Keep in mind, many "lookers" that are turned away by Realtors keep looking - they find the For Sale by Owner’s instead.

A Qualified Buyer is someone who is ready, willing and able to buy your property. We find that most people who go looking at For Sale by Owners are either just starting to look or they’re looking for a steal. Many of them may be good buyers, but they’re 6-9 months away from being ready to buy. They don’t want to bother an agent yet, so they call the "By Owner" ads to see what’s available.

Many potential buyers may have a house to sell first, or may need to save some more, or may have credit that needs to be fixed. When everything is in place, that’s when they go out looking with a Realtor.

A professional Realtor will ask a buyer how much he or she can really spend for a property, how much he or she has to put down, how good their credit is, how much he or she can pay each month and how much they will realize when they sell their present property, and about a dozen other questions like these. But unless your Realtor finds all the facts first, you must ask all these questions before the buyer crosses your threshold. Otherwise, you may have a parade of Sunday afternoon shoppers with a dream of owning a horse farm... some day... maybe.

Real Estate law is extensive and complex; the contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through, or cost you thousands for repairs, inspections and remedies for items included or excluded in the offer. You must be certain which repairs and closing costs you are responsible for. You must know whether the property can legally be sold "as is", and how deed restrictions and local zoning will affect the transaction. If there are defects in your title, or if your property is in conflict with local restrictions on uses, you or your Realtor must remedy them, or you might have to pay later!

Don't Limit the Marketing & Exposure of the Property.

The two most obvious marketing tools are Open Houses and Classified Ads. These tools are only moderately effective. Surprisingly, less than 1% of all property is sold at an Open House. Realtors use them to attract future prospects, not to sell your property.

Advertising studies show that less than 3% of people purchased their home because they called on an ad. The right Realtor will employ a broad spectrum of marketing activities, emphasizing the ones he or she believes will work the best for you and your particular property. There are dozens of more effective ways to find buyers than just open houses and advertising.

Don’t ignore the power of the Internet! Quickly becoming one of the top 3 sources for buyers finding Real Estate, make sure your agent lists your property for sale on the major real estate sites like Move.com and Realtor.com. Also ask your Realtor if they know about the dozens of specialty sites across the country that allow Realtors to specifically list Horse Properties, Farms and Ranches for sale to a national audience of buyers.

Also, don't forget to put up a sign!  So many farm owners don't want the neighbors to know the property is for sale.  A sign is too powerful a marketing tool to be left out!

An appraisal is an opinion of value for a certain purpose. If the lender wants to lend you money, they are motivated to have the appraisal come in high. The appraiser may ignore distress sales and some comparable sales in favor of other sales in order to justify the higher value. But a real buyer in the real world will not ignore these properties. They are your competitors when you try to sell.

We can’t tell you how many ridiculous bank appraisals we’ve seen. This is particularly true of re-finances where the lender really wants to lend the money, or of a home-equity loan which generally is at a higher interest rate. Don’t make the mistake of thinking that the value you were told even 6 months ago when you re-financed is what a real buyer would pay. Ask your Realtor for all the sold properties in your area, then decide!